* FTSE rises 0.8 percent
* Shell up on Q3; BG Group rises as starts Tupi production
* Banks in demand ahead of trading updates
By Tricia Wright
LONDON, Oct 28 (Reuters) - Britain's top share index rose on Thursday, buoyed by commodity stocks which rebounded after sharp falls in the previous session, with Royal Dutch Shell in demand as investors cheered its third-quarter results.
By 0811 GMT, the FTSE 100 was up 43.56 points, or 0.8 percent, at 5,689.58, recovering after it fell 1.1 percent to 5,646.02 on Wednesday, its lowest closing level since Oct. 5.
Energy stocks were in favour. Shell advanced 0.7 percent after it beat all analyst forecasts by reporting an 18 percent jump in third-quarter profits thanks to higher oil and gas prices, setting a trend for the sector.
And BG Group added 0.5 percent after saying it had begun production from Tupi, one of its key fields, in the Santos basin off the coast of Brazil.
"The market really is just bouncing off the 5,650 area," Angus Campbell, head of sales at Capital Spreads, said.
"It would seem that once again despite all the concerns over Europe and sovereign debt, which have re-emerged, the sell-off over the last couple of days may have presented a buying opportunity," he said.
Strength was also seen from miners as a weaker dollar buoyed metals prices.
Kazakhmys firmed 1.2 percent. The Kazakh miner posted a 9.3 percent fall in third-quarter copper production and reiterated its full-year target as demand remained buoyant.
The group said sales to China, the world's biggest consumer of industrial minerals, continued at a rapid pace.
BANKS' UPDATES EYED
Buyers came in for banks ahead of trading statements due over the next couple of weeks.
Royal Bank of Scotland and HSBC, both scheduled to issue updates on Nov. 5, rose 0.8 percent and 0.7 percent respectively, while Lloyds Banking Group climbed 0.3 percent ahead of its update on Nov. 2.
JPMorgan Chase & Co and HSBC Holdings were hit with two lawsuits on Wednesday by investors who accused them of conspiring to drive down silver prices and reaping an estimated hundreds of millions of dollars of illegal profits.
AstraZeneca was the top FTSE 100 faller, off 1.6 percent, as the drugmaker's revenue fell 4.0 percent in the third quarter, hit by generic competition to key drugs and the absence of last year's windfall sales of swine flu vaccine.
Aggreko was also out of favour, down 1.9 percent. The provider of temporary power raised its full-year outlook again, with Panmure Gordon keeping its "hold" rating on the stock, saying the good news is all priced in.
Analysts expect markets to remain choppy in the run up to the U.S. FOMC Nov. 2-3 policy-setting meeting.
The latest Reuters survey showed most leading economists expect the Federal Reserve to buy between $80 billion and $100 billion worth of assets per month, with estimates for how much it will eventually spend varying from $250 billion to $2 trillion.
British house prices fell for the third month in four in October, a survey by mortgage lender Nationwide showed, in a sign the downturn in the country's property market is becoming more entrenched. (Editing by Michael Shields)